With a market capitalisation of just ₹12.00 crores and the stock trading at ₹36.94, down 36.00% over the past year, investor sentiment remains decidedly negative. The company's proprietary Mojo score stands at a concerning 21 out of 100, firmly in "Strong Sell" territory, reflecting deteriorating fundamentals and weak technical momentum.
The September 2025 quarter marks a concerning reversal for Ashish Polyplast, as the company swung from a healthy profit of ₹0.39 crores in Q1 FY26 to a loss of ₹0.07 crores in Q2 FY26. This represents a complete erosion of profitability despite revenue declining by a modest 1.34% quarter-on-quarter to ₹3.69 crores. The PAT margin collapsed from a positive 10.43% to a negative 1.90%, signalling severe operational stress.
Quarterly Performance: A Troubling Trajectory
| Quarter | Revenue (₹ Cr) | QoQ Growth | Net Profit (₹ Cr) | QoQ Change | PAT Margin |
|---|---|---|---|---|---|
| Sep'25 | 3.69 | -1.34% | -0.07 | Loss | -1.90% |
| Jun'25 | 3.74 | +2.19% | 0.39 | Strong | 10.43% |
| Mar'25 | 3.66 | -18.12% | -0.40 | Loss | -10.93% |
| Dec'24 | 4.47 | +28.08% | 0.02 | Breakeven | 0.45% |
| Sep'24 | 3.49 | -20.50% | 0.29 | -12.12% | 8.31% |
| Jun'24 | 4.39 | +10.30% | 0.33 | +371% | 7.52% |
| Mar'24 | 3.98 | — | 0.07 | — | 1.76% |
The quarterly trend reveals extreme volatility in both revenue and profitability. Over the past seven quarters, the company has posted losses in two quarters (Mar'25 and Sep'25), with profitability swinging wildly between negative 10.93% and positive 10.43% margins. Revenue has oscillated between ₹3.49 crores and ₹4.47 crores, demonstrating an inability to achieve consistent growth momentum.
Financial Performance: Margin Compression and Cost Pressures
In Q2 FY26, Ashish Polyplast's net sales stood at ₹3.69 crores, marginally lower by 1.34% from ₹3.74 crores in Q1 FY26. On a year-on-year basis, revenue grew 5.73% from ₹3.49 crores in Sep'24, providing some respite. However, this modest top-line growth was completely overshadowed by a collapse in profitability metrics.
The operating profit (PBDIT excluding other income) declined to ₹0.10 crores from ₹0.12 crores quarter-on-quarter, pushing the operating margin down to 2.71% from 3.21%. More alarmingly, other income turned sharply negative at ₹-0.12 crores compared to a positive ₹0.42 crores in the previous quarter. This negative other income—likely reflecting mark-to-market losses on investments or exceptional charges—was the primary driver behind the profit-to-loss swing.
After accounting for interest costs of ₹0.03 crores and depreciation of ₹0.06 crores, profit before tax came in at ₹-0.11 crores. The company recorded a tax credit of ₹0.04 crores (effective tax rate of 36.36%), resulting in a net loss of ₹0.07 crores for the quarter. This marks a dramatic reversal from the ₹0.39 crores profit posted just three months earlier.
Critical Profitability Concern
The swing from a ₹0.39 crores profit in Q1 FY26 to a ₹0.07 crores loss in Q2 FY26 represents a complete erosion of shareholder value in a single quarter. The negative other income of ₹0.12 crores suggests either investment losses or one-time charges that management has not adequately explained. With operating margins already razor-thin at 2.71%, the company has minimal buffer against further operational stress.
Operational Challenges: Weak Returns and Balance Sheet Concerns
Ashish Polyplast's operational efficiency metrics paint a concerning picture. The company's average return on equity (ROE) over recent years stands at just 6.43%, well below the industry average and indicative of poor capital utilisation. The latest quarterly ROE has deteriorated further to a negative 0.89%, reflecting the recent loss-making quarter. Return on capital employed (ROCE) fares marginally better at 4.36% on average, but remains anaemic for a manufacturing business.
The company's balance sheet as of March 2025 shows shareholder funds of ₹6.72 crores, comprising share capital of ₹3.40 crores and reserves of ₹3.32 crores. Long-term debt stands at a manageable ₹0.15 crores, down from ₹0.23 crores the previous year, suggesting low financial leverage. However, current liabilities have decreased to ₹0.93 crores from ₹1.26 crores, with trade payables declining from ₹0.90 crores to ₹0.50 crores—potentially indicating strained supplier relationships or reduced business activity.
On the asset side, fixed assets total ₹2.23 crores, while investments have grown to ₹3.07 crores from ₹2.07 crores year-on-year. Current assets have contracted to ₹2.69 crores from ₹3.64 crores, suggesting potential working capital pressures. The book value per share stands at ₹19.77, providing some downside protection at the current market price of ₹36.94, though the price-to-book ratio of 1.82x appears expensive given the weak profitability profile.
Quality Concerns: Below Average Fundamentals
Ashish Polyplast carries a "Below Average" quality grade, reflecting weak long-term financial performance. The company's 5-year sales growth of 6.22% is modest, while 5-year EBIT growth is actually negative at -0.81%, indicating deteriorating operational profitability over time. The average EBIT-to-interest coverage ratio of just 0.27x is alarmingly low, suggesting the company barely generates enough operating profit to service its interest obligations.
Industry Context: Underperforming in a Challenging Sector
The plastic products manufacturing sector in India has faced headwinds from volatile raw material prices, particularly crude oil derivatives, and intense competition. Ashish Polyplast operates in the industrial plastic products segment, manufacturing premium braided hoses and flexible PVC pipes under the "REALON" brand. However, the company's micro-cap status and limited scale place it at a significant disadvantage compared to larger, more diversified peers.
Over the past year, the broader Plastic Products - Industrial sector has declined by 9.82%, but Ashish Polyplast has underperformed dramatically with a 36.00% drop, lagging the sector by 26.18 percentage points. This massive underperformance reflects company-specific issues beyond broader sector challenges, including volatile earnings, weak profitability metrics, and lack of investor confidence.
Peer Comparison: Lagging on Key Metrics
| Company | P/E (TTM) | ROE (%) | Debt/Equity | Price/Book | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Ashish Polyplast | NA (Loss Making) | 6.43% | 0.00 | 1.82 | 12.00 |
| L.K. Mehta Poly. | 31.87 | 11.48% | 0.13 | 1.76 | — |
| Kunststoff Inds. | 22.34 | 11.66% | -0.70 | 1.53 | — |
| Kkalpana Plastic | 267.12 | 0.0% | 0.00 | 2.54 | — |
| JMG Corporation | NA (Loss Making) | 0.67% | 0.02 | 1.62 | — |
Compared to its peer group, Ashish Polyplast demonstrates mixed positioning. While its ROE of 6.43% exceeds some peers like JMG Corporation (0.67%) and Kkalpana Plastic (0.0%), it lags significantly behind L.K. Mehta Polyplast (11.48%) and Kunststoff Industries (11.66%). The company's zero debt-to-equity ratio is a positive, indicating conservative financial management, but this hasn't translated into superior profitability.
The price-to-book ratio of 1.82x is higher than most peers except Kkalpana Plastic, suggesting the market is pricing in a premium that current fundamentals do not justify. With the company currently loss-making on a trailing twelve-month basis, the P/E ratio is not applicable, placing it in the same category as JMG Corporation among loss-making peers.
Valuation Analysis: Expensive Despite Weak Fundamentals
At the current price of ₹36.94, Ashish Polyplast trades at a price-to-book value of 1.82x, which appears expensive given the company's weak profitability and below-average quality grade. The stock recently shifted from "Very Expensive" to "Fair" valuation on November 3, 2025, following the sharp price decline from its 52-week high of ₹63.90.
The company's enterprise value-to-sales ratio of 0.79x and EV/EBITDA of 12.23x suggest modest multiples on an absolute basis. However, these metrics must be viewed in the context of deteriorating earnings quality, negative ROE in the latest quarter, and a history of volatile profitability. The stock currently trades 42.19% below its 52-week high but remains 22.93% above its 52-week low of ₹30.05, suggesting limited downside cushion.
Given the company's weak fundamentals, negative earnings trajectory, and below-average quality profile, the current valuation offers no margin of safety. The proprietary Mojo score of 21 out of 100 places the stock firmly in "Strong Sell" territory, reflecting the confluence of poor technicals, deteriorating financials, and expensive valuation relative to quality.
Shareholding Pattern: Stable but Lacking Institutional Confidence
| Category | Sep'25 | Jun'25 | Mar'25 | Dec'24 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 62.09% | 62.09% | 62.09% | 62.09% | 0.00% |
| FII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Mutual Fund | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-Institutional | 37.91% | 37.91% | 37.91% | 37.91% | 0.00% |
The shareholding pattern reveals a completely stable structure with promoter holding steady at 62.09% and no institutional participation whatsoever. The absence of any FII, mutual fund, insurance company, or other domestic institutional investor holdings is a significant red flag, indicating that sophisticated investors have shown no interest in the stock despite its micro-cap status potentially offering value opportunities.
The promoter group, led by Ashish Dahyabhai Panchal (54.73%) and Kantaben Dahyabhai Panchal (7.36%), has maintained consistent holdings with zero pledging—a positive sign of promoter commitment. However, the complete lack of institutional validation, combined with 37.91% non-institutional (retail) holdings, suggests this remains a highly speculative stock with limited research coverage and liquidity.
Stock Performance: Severe Underperformance Across Timeframes
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +4.06% | +1.52% | +2.54% |
| 1 Month | -3.48% | +2.73% | -6.21% |
| 3 Month | +4.50% | +5.01% | -0.51% |
| 6 Month | -1.76% | +4.22% | -5.98% |
| YTD | -31.59% | +8.24% | -39.83% |
| 1 Year | -36.00% | +8.86% | -44.86% |
| 2 Years | +73.59% | +30.25% | +43.34% |
| 3 Years | +60.61% | +36.86% | +23.75% |
The stock's performance trajectory reveals a dramatic reversal of fortune. While Ashish Polyplast delivered strong returns over 2-year (+73.59%) and 3-year (+60.61%) periods, significantly outperforming the Sensex, the past year has been disastrous. The stock has plunged 36.00% over the last 12 months while the Sensex gained 8.86%, resulting in a negative alpha of 44.86 percentage points.
Year-to-date, the stock is down 31.59% compared to the Sensex's 8.24% gain, underperforming by nearly 40 percentage points. The recent week has seen a modest bounce of 4.06%, but this appears to be a technical rebound rather than any fundamental improvement. The stock's high beta of 1.50 indicates significantly higher volatility than the broader market, with annualised volatility of 62.70%—making it unsuitable for risk-averse investors.
"With negative ROE, deteriorating margins, and a Mojo score of just 21 out of 100, Ashish Polyplast exemplifies a value trap—seemingly cheap on book value but fundamentally broken."
Technical Analysis: Mildly Bearish Trend with Limited Support
From a technical perspective, Ashish Polyplast remains in a "Mildly Bearish" trend as of November 7, 2025, having transitioned from a more severely bearish outlook. The stock trades below all key moving averages—5-day (₹36.07), 20-day (₹36.98), 50-day (₹38.00), 100-day (₹37.93), and 200-day (₹39.95)—indicating sustained selling pressure and lack of buying support.
The immediate support level sits at the 52-week low of ₹30.05, just 18.65% below current levels, providing limited downside cushion. Immediate resistance emerges at the 20-day moving average of ₹36.98, with major resistance zones at ₹37.93 (100 DMA) and ₹39.95 (200 DMA). The 52-week high of ₹63.90 appears distant, requiring a 73% rally from current levels—an unlikely scenario given deteriorating fundamentals.
Technical indicators present mixed signals. The MACD shows "Mildly Bullish" on weekly charts but "Mildly Bearish" on monthly charts, suggesting short-term momentum without conviction. RSI shows no clear signal, while Bollinger Bands indicate a sideways-to-bearish pattern. The Dow Theory suggests "Mildly Bearish" on monthly charts with no clear trend on weekly timeframes. Overall, the technical setup offers no compelling entry point for investors.
Investment Thesis: Multiple Red Flags Outweigh Limited Positives
The investment thesis for Ashish Polyplast is overwhelmingly negative across all key parameters. The company's quality grade of "Below Average" reflects weak long-term fundamentals, with 5-year EBIT growth actually negative at -0.81%. The financial trend is classified as "Flat" with no visible growth momentum, while technicals remain "Mildly Bearish" with the stock trading below all major moving averages.
While the valuation has moderated to "Fair" from previously expensive levels following the stock's 36% decline over the past year, this merely reflects the market's recognition of deteriorating fundamentals rather than any genuine value opportunity. The company's weak profitability, volatile earnings, razor-thin margins, and complete absence of institutional investor interest all point to a value trap rather than a value opportunity.
Key Strengths & Risk Factors
Key Strengths
- Zero Debt: Conservative balance sheet with debt-to-equity of 0.00 and no promoter pledging
- Stable Promoter Holding: Consistent 62.09% promoter stake with no dilution over recent quarters
- Established Brand: "REALON" brand has presence in premium braided hose segment
- Modest YoY Revenue Growth: Q2 FY26 revenue grew 5.73% year-on-year despite challenges
- Recent Technical Bounce: Stock up 4.06% over the past week from oversold levels
Key Concerns
- Loss-Making Quarter: Swung from ₹0.39 crores profit to ₹0.07 crores loss in Q2 FY26
- Negative Other Income: Unexplained ₹-0.12 crores other income in Q2 raises questions
- Weak Profitability: Average ROE of just 6.43% and latest ROE negative at -0.89%
- Volatile Earnings: PAT margins swinging from -10.93% to +10.43% across quarters
- No Institutional Interest: Zero FII, MF, or insurance holdings indicates lack of confidence
- Severe Underperformance: Stock down 36% vs Sensex up 8.86% over past year
- Below Average Quality: 5-year EBIT growth negative at -0.81%
Outlook: What to Watch
Positive Catalysts
- Return to consistent quarterly profitability with PAT margins above 5%
- Explanation and resolution of negative other income issue
- Revenue growth acceleration above 10% on sustainable basis
- Entry of institutional investors (FII/MF) validating the story
- Operating margin expansion beyond 5% through better cost management
Red Flags to Monitor
- Another loss-making quarter in Q3 FY26 would confirm deteriorating trend
- Further decline in operating margins below 2% levels
- Continued negative or volatile other income in coming quarters
- Any promoter stake reduction or pledging of shares
- Revenue declining on YoY basis for consecutive quarters
The Verdict: Exit Recommended
Score: 21/100
For Fresh Investors: Avoid completely. The combination of loss-making operations, volatile earnings, weak profitability metrics, and lack of institutional interest makes this an unsuitable investment. The stock offers no margin of safety despite recent price declines.
For Existing Holders: Exit on any technical bounce. The deteriorating financial trend, swing to loss-making operations, and bearish technical setup suggest further downside risk. The absence of any credible turnaround catalyst makes holding unjustifiable.
Rationale: Ashish Polyplast's swing from profit to loss in Q2 FY26, combined with weak long-term fundamentals (negative 5-year EBIT growth), below-average quality grade, and severe stock underperformance (-36% vs Sensex +8.86%), creates a compelling case for avoidance. The stock exemplifies a value trap—appearing cheap on book value (P/BV 1.82x) but fundamentally broken with no visible path to sustainable profitability.
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Investments in micro-cap stocks carry significantly higher risks including liquidity risk, volatility, and potential loss of capital.
